In most cases, a TPD claim can be made at the same time as claims for income protection benefits, provided that you have your doctors’ support that you meet both of the relevant definitions. This means that many people can make the two claims simultaneously.
We find that many people assume, incorrectly, that either:
- they cannot claim a TPD benefit until they have been paid all of the income protection payments; and/or
- claiming a TPD benefit will end their income protection payments.
If you have both TPD cover and income protection insurance but you’re unsure if the specific circumstances of your injury or illness and your insurance will allow you to claim both at the same time, give us a call for some free advice.
What happens once I lodge both my TPD claim and income protection claim?
Usually, the income protection claim will be paid more quickly after claim forms are lodged because the definition is easier to meet. This is because the income protection definition usually doesn’t need a permanent work incapacity.
After the income protection claim is approved, those payments will be paid each month provided that your doctors support that you satisfy the policy definition. Up until this time, the TPD claim has also been assessed parallel to the income protection claim, and now that the income protection claim is approved, the assessment of the TPD claim can continue on its own.
Medical and other evidence from the income protection claim can be used to assess the TPD claim (and vice versa). It’s important to be mindful that this can bring both negative and positive outcomes to the claim. For example, if you lodge income protection claim forms completed by your doctor, which say you are not able to work for a particular period of time (e.g. 3 months), these forms can prejudice the TPD claim, which requires a permanent work incapacity. Importantly, medical and other evidence can be available between TPD and income protection claims, even if the claims are being made to different insurers.
Eventually, a decision will be made on the TPD claim, and that benefit can be paid either into your super account if it’s a super-based benefit or directly to you if it’s not. The TPD benefit will not offset the income protection payments, and it will not usually otherwise impact your entitlement to the income protection benefits. However, there are some exceptions, and in some circumstances, claiming and being paid a TPD benefit can stop your income protection benefit payments. If this happens to you, seek legal advice.
When can being paid a TPD benefit stop income protection benefit payments?
Some income protection benefits have clauses which say that the income protection payments will stop if you are paid a TPD benefit under the same or associated insurance policy. When claiming on these policies, you should consider delaying making your TPD claim to increase the amount of the income protection benefits you get.
The situation where payment of the TPD benefit stops your income protection payments is not common, but can be found in some state Government super schemes (for example Super SA and QSuper) and also on some AMP and other retail insurance policies. But the issue can arise on any income protection policy.
Where these rules apply, care must be taken when making a TPD claim alongside an income protection claim to make sure that you do not prematurely end your claim for income protection benefits. Importantly, the rule is not normally an offset issue (as we see with some personal injury common law claims). In other words, the TPD benefit does not normally offset your income protection payments. Rather, it is a rule that says that if you are paid a TPD benefit, you are no longer entitled to income protection payments.
We have even seen some cases where insurers decide to pay a TPD when there hasn’t been a claim for a TPD benefit made. That is, the insurer just says to the person, “here is your TPD benefit”, and then stops the income protection payments!
Insurers might do this because the TPD benefit amount is small compared to the ongoing income protection benefit payments. This has been something that we were able to challenge in many cases in the past to get the income protection payments reinstated, but it causes a bit of a legal headache!
How do you know if claiming your TPD benefit will end your income protection entitlement?
The only way to know for certain is to check the policy wording for both your TPD insurance and your income protection insurance. We can say that the Super SA scheme, which is different to most other super-based disability insurance schemes, has rules that mean that:
- claiming TPD requires you to terminate your employment; and
- you are not entitled to income protection benefits after you terminate your employment.
Therefore, claiming and being paid the TPD benefit will end your SuperSA income protection payments (as will any other action you might take which ends your employment, like taking a redundancy). However, these rules are unique to SuperSA and are not seen in any other super or insurance schemes.
If you are a member of QSuper (the government employee division of the Australian Retirement Trust), your income protection benefits will usually stop if you have a successful TPD claim. So, in most cases, people lodge their income protection claim first and then their claim for TPD is assessed towards the end of the income protection benefit period.
Issues between TPD and income protection entitlements can also be found in other super and non-super-based insurance policies, and you should always get advice before making a claim for either. You should also be aware that sometimes your super fund or insurer will encourage you to make a TPD claim, and they won’t always advise you that doing this will impact on your income protection payments.
For this reason, we offer a free service where we will check your super/insurance documents to see if claiming will impact your ongoing income protection payments.
Get help from a disability insurance lawyer
We are experts at TPD and income protection claims and can assist with such claims giving you confidence that you are claiming your maximum entitlements. We provide free advice and run claims on a ‘no win, no fee’ basis, so it costs you nothing to find out where you stand.
Contacting Berrill & Watson
📞 Melbourne: 03 9448 8048
📞 Brisbane: 07 3013 4300
📞 Anywhere else in Australia: 03 9448 8048
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We are Australia's best-value superannuation/insurance law firm. Other law firms charge nearly double (& sometimes more than double) what we charge. So, if you get a quote from them, or have a cost agreement, ask us what we will charge you.
Further reading
- Can I make a claim for a TPD benefit on more than one policy or superannuation account?
- What’s the deal with TPD claims and your capacity to work?
- What's the difference between income protection and TPD insurance?
- Can an insurer stop paying my income protection insurance benefits?
- Three options to appeal a rejected insurance claim